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Your Trusted Mortgage BrokerMon, 19 Nov 2018 20:36:07 +0000en-UShourly1https://wordpress.org/?v=4.9.8Tips for Getting the best Fort McMurray Mortgage Ratehttps://whalenmortgages.com/tips-for-getting-the-best-fort-mcmurray-mortgage-rate/
https://whalenmortgages.com/tips-for-getting-the-best-fort-mcmurray-mortgage-rate/#respondThu, 01 Nov 2018 04:29:58 +0000https://whalenmortgages.com/?p=897Canadians look for deals, but many opt for the first mortgage they are offered. We know this because an international HSBC survey found that Canadians came in tenth in the number that bothered to shop for a better mortgage rate. Yet the size of a mortgage means that saving a fraction of a percent here could add up to hundreds or thousands saved over the life of a loan. Here are our tips for getting the best Fort McMurray mortgage rate.

Use a Rate-Comparison Website

Rate-comparison websites allow you to see what various mortgage lenders would offer you based on a few key pieces of information like your credit, the size of the down payment, and the value of the property. You’ll be shown the likely mortgage offers you’d receive and the conditions such as the interest rate offered and fees you may be charged. Another benefit of these comparison sites is the ability to run the numbers. How much would you save in interest over the life of the loan if you chose a shorter loan term or paid a slightly larger down payment? Which lenders would offer a lower down payment if you paid more in up-front fees? How much could you save if you improved your credit score by paying down debt or cleaning up your credit report?

The interest rate comparison website is supported by the mortgage lenders who advertise on that site. It is possible that you may only be able to secure those terms by working with the mortgage broker that runs the site.

Work with a Mortgage Broker

A good way to secure the best mortgage rate is to work with a Fort McMurray mortgage broker. They receive discounts from their network of mortgage lenders because they send so much business their way. The mortgage broker passes these savings on to their customers. They can provide actionable advice for cleaning up your credit or structuring the loan in a way that minimizes your risk profile so you can qualify for a better interest rate. Their network of lenders will include at least one willing to loan money for properties other lenders consider risky, whether it is a fixer-upper, rural cabin off the grid or land for a trailer.

Negotiate with Your Preferred Lender

You do have the ability to negotiate a mortgage the same way you can negotiate down the purchase price of a home. You may be able to get a lower interest rate or lower closing costs if you negotiate. This process is made easier if you have data from a mortgage interest rate comparison website, since you can show them what other lenders would be willing to offer you. Your current lender could give you a lower interest rate if you allow the house payment to be deducted from your bank account. Ask what you could do to qualify for a better interest rate or lower fees. You lose nothing for asking and could literally save quite a bit.

Call Jodi Whalen with Whalen Mortgages today to get the best mortgages rates in Fort McMurray.

]]>https://whalenmortgages.com/tips-for-getting-the-best-fort-mcmurray-mortgage-rate/feed/0Factors That Determine Your Eligibility for a Mortgage https://whalenmortgages.com/factors-that-determine-your-eligibility-for-a-mortgage/
https://whalenmortgages.com/factors-that-determine-your-eligibility-for-a-mortgage/#respondMon, 01 Oct 2018 03:31:30 +0000https://whalenmortgages.com/?p=884Sometimes it is you – or rather your credit – that determines your eligibility for a mortgage and the interest rate you’d be charged. However, a number of factors about the property itself determine whether or not you can get a mortgage for it and the rate you’d be charged. Let’s look at each in detail.

The Type of Property

The lowest interest rates and down payments are reserved for insured high ratio mortgages meaning less than 20% down payment with CMHC insurance or another Canadian Mortgage default insurer. You may need to pay more down payment if your credit is not great to mitigate some risks.

You’re going to need to put down more money or pay a higher interest rate (or both) on second homes or seasonal homes than you would for a home you live in full-time. You cannot qualify for a residential mortgage if buying a working farm not intended to be your home rather you want to keep it as a working farm. Relatively few residential mortgages will extend a primary home mortgage if it is viewed as a rental unless it is a single family home with a legal mortgage helper generally seen in homes with legal suites in the basement. If you want to buy a home with a commercial storefront in front or on the first floor, most mortgage lenders will refuse because it is seen as too great a risk. These are things we need to make sure the lender and if required the insurer are ok with proceeding. This is where Whalen Mortgages comes into help, we research the properties for you upfront if you tell us the one you are interested in to make sure we are not caught with any hidden surprises regarding your mortgage approval.

The Property’s Location

If your property is outside of a major housing market, it may be viewed as a vacation home and need 35% down payment to purchase unless you are prepared to pay default mortgage insurance through CMHC to help mitigate the risks regardless of the loan to value or another option is a private lender with higher down payment and higher interest rates. Lenders may refuse to issue a mortgage for properties in a bad neighborhood, where marketability can be an issue or require a larger down payment.

Lenders may decline to issue a mortgage if they see the property as too great a risk to them, though the property is in good shape. For example, a condo in an older building may require a larger down payment or a more detailed analysis of the condo association’s financial reports before they let you take out a mortgage to buy it. If the lender has already issued a number of mortgages for condos in that building, they may decline in your case because they don’t want to have too much money tied up in that one project. This is where Whalen Mortgages your Fort McMurray Trusted Mortgage Brokers can come into help and find a lender willing to finance the property you love.

The Property’s Use

Commercial properties cannot be bought with a residential mortgage. If you want to buy an investment property, conventional mortgage lenders will not offer you the same great terms they would if you were going to live in the property. Rental properties do hold higher interest rates and are not able to be insured so require you to put 20% down payment.

A rural lot with enough acreage for a large garden or horses probably doesn’t count as a farm, so you could buy it with less the 20% down as a high ratio insured residential mortgage. If the property is a working commercial farm, then you’ll be forced to take out a farm loan.

Vacation homes and second homes require a larger down payment than a primary residence. If you make the second home your primary residence, you may be able to qualify for 5% down payment as the new home will be bought as your new primary residence and your other home may be turned into a rental which we can use a rental offset with a lease or you may decide to sell the home all together.

]]>https://whalenmortgages.com/factors-that-determine-your-eligibility-for-a-mortgage/feed/0How Can You Build Home Value?https://whalenmortgages.com/how-can-you-build-home-value/
https://whalenmortgages.com/how-can-you-build-home-value/#respondFri, 15 Jun 2018 20:35:37 +0000https://whalenmortgages.com/?p=734A lot of people ask me, “Where can I go to get the best value on my house?” You don’t want to buy something just to buy it. You want to buy something that will increase in value over the next five years.

One way to go is to buy the first house in a new subdivision in Fort McMurray. That property will definitely go up in value because everything else will follow it. As the builder raises prices, your home’s value will go up.

You could also find a house that has strong value to it. The home should have strong bones. Look for homes that have been renovated to meet today’s standards. It doesn’t need to have all of the updates, but it needs to be livable so that you can build value on the house.

Of course, the location of the home will greatly affect its value. Abasand, Beaconhill, Thickwood, Dickinfield and Timberlea are great areas to buy in Fort McMurray. Anzac and Gregoire Lake Estates are also great places to check out. That’s a great starting point for you to build equity.

If you have any Fort McMurray Mortgage questions or needs, please don’t hesitate to reach out to me! I’m always available to help!

]]>https://whalenmortgages.com/how-can-you-build-home-value/feed/0Top Things to Look for in a Fort McMurray Mortgage Broker https://whalenmortgages.com/top-things-to-look-for-in-a-fort-mcmurray-mortgage-broker/
https://whalenmortgages.com/top-things-to-look-for-in-a-fort-mcmurray-mortgage-broker/#respondFri, 01 Jun 2018 17:48:09 +0000https://whalenmortgages.com/?p=726While finding the best mortgage for you and your budget is a challenge, that process is made easier by working with a Fort McMurray Mortgage Broker. However, it is essential that you find the right mortgage broker for you. What should you look for in a Fort McMurray mortgage broker?

A Diverse Portfolio

A mortgage broker who refers you back to your bank and the one across the street hasn’t really performed a useful service. You could get that information yourself rather quickly. The greatest service that mortgage brokers provide their customers their deep network of lenders; these lenders range from big banks to credit unions to unconventional lenders. This broad network is critical when you’re trying to figure out who would be willing to lend money to less than ideal borrowers or for unconventional properties.

The Right Attitude

A good mortgage broker is providing a financial service, but they aren’t putting you under pressure to agree to work with them. A major red flag is a mortgage broker who pressures you to sign a mortgage you don’t understand; that’s why you want to research the reputation of the mortgage broker for complaints of them demanding just this sort of thing. Nor would a good mortgage broker make you feel like a fool for asking reasonable questions about loan terms or even what phrases mean. Yet it is a mistake to assume that someone who is energetic and helpful is necessarily useful – the upbeat but inexperienced person is not the one to take your case.

Good Fort McMurray Mortgage Brokers are professionals. They only work as mortgage brokers, and they do so full time. Conversely, a business that says it inspects houses, provides mortgages and can show you properties is setting you up to be scammed. Be wary of any business that says it has separate divisions that offer all of these services though they’re under the same roof.

A Good Team

The best mortgage broker service isn’t a one-person operation. You don’t want to work with a mortgage brokerage that is really a single person, though they may have a receptionist or assistant. One reason to work with a Fort McMurray Mortgage Broker who has a whole team behind them is the fact that the deal won’t be delayed because the one broker in the office is out sick for a week. When there are several professionals on staff, it is almost certain that there’s someone available to answer questions when you call. Another benefit of searching for mortgage brokerages that have multiple team members is that you can change who you’re working with without having to start your search all over again.

]]>https://whalenmortgages.com/top-things-to-look-for-in-a-fort-mcmurray-mortgage-broker/feed/0Best Kept Secrets of Home Buying Fort McMurrayhttps://whalenmortgages.com/best-kept-secrets-of-home-buying-fort-mcmurray/
https://whalenmortgages.com/best-kept-secrets-of-home-buying-fort-mcmurray/#respondTue, 15 May 2018 17:46:31 +0000http://whalenmortgages.com/?p=673Here are a few of the best kept secrets before buying a home in Fort McMurray. We’ll tell you what you need to know before you start shopping for a home or Mortgage in Fort McMurray and the reasons why ignoring these tips could literally cost you.

Get Pre-Approved before You Shop

Pre-qualification is not the same thing as pre-approved. Pre-qualification simply means you could get a mortgage, not that they will give you one, much less at the current interest rate. While Fort McMurray is a buyer’s market, we are starting to see a shift that suggests it will turn into a seller’s market; you could still lose the house to someone who is pre-approved for the mortgage and able to close right now. Pre-approvals in Fort McMurray shows that you’ve been approved by the lender for a loan up to a certain amount. It also saves you time, since you won’t be looking at houses you cannot afford in Fort McMurray.

Buy When the Time Is Right for You

Don’t try to time the housing market leave that up to the experts in Fort McMurray. If you have a large enough down payment and can afford a home, buy a home you like. Waiting for home prices to come down in Fort McMurray could leave you stuck with a 5% more expensive house next year. And you’re not building equity in your own home. So if you can afford a home, go ahead and buy when it is right for you. This could really save your sanity if you need a larger home and/or yard for the kids and pets.

Don’t Pile Up Debt

It is a major mistake to start piling up debt before you plan on buying a house or when you’re in the process of closing on a house. For example, you will hurt your debt to income ratio if you buy a car with a loan a few months before you buy a house also this will make the lender fear by giving you a mortgage you may face payment shock. Conversely, if you make progress paying off debt, you’ll have a better loan to income ratio. Just make sure you don’t go deeper into debt after you buy the house.

Another mistake is reacting to the thrill of buying a new home by buying items on credit to fill it. This means taking your time buying furniture and not going overboard with new everything. You qualified for the mortgage based on your current ability to pay debt; adding several hundred a month in loan payments for home renovations and furniture hurts your ability to pay your house, especially if life throws any hurdles at you. This could also jeopardize your Fort McMurray mortgage approval.

If you want to buy a house that requires renovation, talk to a Fort McMurray mortgage broker about options like purchase plus improvements mortgages that give you cash to pay for repairs and renovation without tacking another loan onto your credit report. The side benefit to this approach is that you have your budget and are more likely to stay within it than if you just take out a home equity line or credit card loan.

Know Exactly What You Are Buying

One variation of this advice is to know exactly what you’re buying. Will the home come furnished? If so it needs to be addressed that the furnishings come as 0 value. Which appliances will it come with? This could impact your budget for moving in. Which household items like drapes and shelves are staying, and what will you need to replace?

Another variation of this is having a survey done of the property to know exactly how much land you’re buying. You don’t want to assume you’re getting that quarter acre stretch behind the house if it belongs to someone else or is part of a utility easement. This information also impacts your property tax bill.

Don’t Buy a Home in the Hope You’ll Grow into It

It is a major mistake to buy a home hoping you’ll “grow” into it. Your property tax is based on the valuation of the home, so buying a very large home with space you may never use inflates your tax bill unnecessarily. That’s aside of how the larger home costs you money in the form of higher utility bills. If you buy a home you can barely afford, you may spend so much money servicing debt you cannot save for emergencies (including repair bills) or retirement. And if you buy a home in an upscale area with barely the money to pay for it, the odds are that you’ll spend more on decorating, maintenance and lifestyle. The effect is so great that the book “The Millionaire Next Door” found that people who buy a house hoping to become successful financially essentially guarantee that they won’t. Buy a home you can easily afford now, so you can start paying it down and accumulating wealth.

On May 9, 2018, the Bank of Canada raised the qualifying mortgage rate used for mortgage stress testing from 5.14% to 5.34%. This is not the rate you will pay, rather this is the rate we are required to use to qualify you for a mortgage. This rate is determined by the big 5 banks average Posted rate and they have increased these rates over the last few weeks resulting in the Bank of Canada’s bench mark rate increasing.

This means that stress tests to verify you can afford a new mortgage or refinanced loan uses a higher interest rate. This will cause some potential home buyers to reduce the amount they can spend unless they have a little more down payment to balance the previous pre-approval. It will impact the total borrowing ability by about 1%, or a few thousand dollars. It is not a substantial jump that will significantly lower your spending ability but something that we wanted to share with our clients so you are aware of the new stress test rate.

We’ve seen a rise in government bond yields. Canadian benchmark bonds have gone from 1.01% to 2.16% in the past year. And both fixed mortgage rates and qualifying mortgage rates have risen with it. The qualifying mortgage rate has been increased several times since mid-2017. It was 4.64% in May of 2017. This has happened despite the Bank of Canada keeping interest rates steady for the time being, though the Bank has warned they’ll probably have to raise interest rates later this year.

TD Bank raised its benchmark rate from 5.14% to 5.59%, however the others increased only to 3.34%. These are Posted rates they are not the actual rate you get when we qualify you for a mortgage. This change will have its greatest impact on first-time home buyers or anyone refinancing their current home. It will lower the amount they can borrow by a few thousand dollars. This is all happening in efforts to cool Canada’s housing market and actually bring home prices down in Toronto and Vancouver where they were climbing at a really high rate very quickly. Saving up for a larger down payment is also an option as you will not need too much more; $5000 will balance out the new qualifying rate in most cases. If you have any questions pleases reach out anytime to discuss.

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]]>https://whalenmortgages.com/mortgage-qualifying-rate-increases/feed/047% of Canadian Mortgages Renew in 2018https://whalenmortgages.com/half-of-canadian-mortgages-renew-in-2018/
https://whalenmortgages.com/half-of-canadian-mortgages-renew-in-2018/#respondTue, 01 May 2018 02:23:03 +0000https://whalenmortgages.com/?p=719

2018 is the year of mortgage renewals in Alberta! This has been Mortgages for Less’ busiest year with mortgage renewals. A CIBC Capital Markets report says that an estimated 47 per cent of all existing mortgages will need to be renewed this year. A normal year sees 25 to 35 per cent of mortgage renew.

Why is this happening?

The increase in mortgages up for renewal in 2018 is an unintended consequence of various rounds of regulatory changes that were designed to reduce mortgage risk that made it harder for home-buyers to qualify. Many borrowers have taken on two or three year mortgage terms in the last five years which are coming up for renewal along with the more typical 5-year mortgages taken out in 2013 according to Ian Pollick, a TD Securities Bond Trader.

What does this mean for me?

New lending rules introduced January 1st are impacting some borrowers looking to renew, but Mortgages for Less has found that the majority of our clients are not impacted by these rules with their renewals. High Ratio mortgages taken out before October 2016 are further unimpacted by the changes as they have been grandfathered under previous guidelines.
Interest rates have increased over the past year so those renewing now will usually see higher rates than they have had for the past five years. That said, variable rates are still often available at 2.45%* and lower, which is most of a percentage rate lower than the more popular 5-year fixed rate mortgage rates starting at 3.24%* today.

What should I do?

Our advice to all our clients and those we talk to is to reach out up to four months prior to your renewal to see what options will be available. Starting four months early will make sure we have the entire four months to snag the lowest rate for you. If you wait for your renewal notice from your bank or mortgage company, those typically come out five weeks before your renewal, and you may miss out on lower rates available earlier. Interest rates have been rising and may continue to do so, and locking in earlier is often a good idea.
Additionally, we have found for much of the last year that mortgage rates offered by our non-bank lending partners have been lower than those offered by the major banks in most situations for most of the last year. Especially if your mortgage is with a major bank, please reach out and we can (usually) save you money.

*Interest rates quotes are available as of May 17, 2018 and are subject to qualification and change without notice. Current rates are shown below and are subject to qualification. Not all rates are available for all mortgages.

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]]>https://whalenmortgages.com/half-of-canadian-mortgages-renew-in-2018/feed/0Slow and Steady Says the Bank of Canada https://whalenmortgages.com/slow-and-steady-says-the-bank-of-canada/
https://whalenmortgages.com/slow-and-steady-says-the-bank-of-canada/#respondSun, 15 Apr 2018 20:05:04 +0000http://whalenmortgages.com/?p=682At the end of 2017, the Canadian economy was described as very close to capacity. As that year drew to a close, economic growth hit 3%. Then things slowed down since then due a number of factors.

One was anxiety over international trade, mostly due to President Trump’s threats to impose various tariffs and renegotiate NAFTA. This caused many Fort McMurray businesses to slow down investment, though they’re currently running at capacity. If they aren’t investing more in equipment and material, they can’t expand and lead to further growth. Transportation bottlenecks are also an issue in places like Fort McMurray and throughout industrial canadian cities.

Oil prices in Fort McMurray remain strong, contributing significantly to GDP, but non-energy exports are sluggish and contributing almost nothing to GDP due to high imports. The Bank thinks that Canada’s GDP will be a third of a percent lower due to the negative impact of slowing exports alone. Conversely, fiscal stimulus from provincial budgets is expected to add 0.4% to Canada’s GDP by 2020.

Canadian businesses providing services to international customers continue to do well, but they’re hindered by a tight supply of skilled labor and high labor costs relative to the competition. Canada’s minimum wage increases are expected to have a transitory impact on inflation in the short term but not significantly affect inflation in the long term. Canada’s job market is on a tear; unemployment is at a forty year low, hovering just under 6%. Labor participation rates are going up, too.

The housing market in Fort McMurray is slowing down by design, but it may crater and take part of the Canadian economy with it; which makes it an interesting time to buy. Contact your Fort McMurray Mortgage Broker today to secure rates at an all time low. New mortgage regulations and other factors explain why the economy’s performance was weaker than expected in the first quarter of 2018. (It was 1.3%.) The central bank, however, says it expects the economy in Fort McMurray to rebound in the latter half of the year. GDP figures for 2018 have been lowered from the initially forecast 2.2% to 2.0%.The estimated growth rate for 2019 is 1.8%.

Right now, benchmark interest rates in Fort McMurray will remain at 1.25%. Governor Stephen Poloz said that inflation was at two percent. Note that this is after several years of inflation rates below the 2% target. Governor Poloz said, “That’s a good starting point because that’s the destination.” If the economy does indeed rebound, then there’s a reason to raise interest rates. The Bank of Canada clearly expects it to rev back up, bringing back the threat of higher inflation. The Bank said, “Higher interest rates will be warranted over time, although some monetary policy accommodation will still be needed to keep inflation on target.”

The Bank of Canada is trying to carefully balance the normalization of interest rates, currently at historic lows, with the risk of causing another economic downturn if they raise them too much. They could guarantee a recession if they raise the rates too fast, given how indebted the average Canadian household is.

Experts are giving the odds of an interest rate hike in May as 50-50. Nearly everyone expects a rate hike by July. A majority consensus says interest rates will go up by a quarter point twice by the end of the year. A few think that interest rates will only go up once in 2018.

]]>https://whalenmortgages.com/slow-and-steady-says-the-bank-of-canada/feed/0How Parents Are Helping Their Children Move Out – And Into A New Home | Fort McMurray Mortgage Brokerhttps://whalenmortgages.com/how-parents-are-helping-their-children-move-out-and-into-a-new-home/
https://whalenmortgages.com/how-parents-are-helping-their-children-move-out-and-into-a-new-home/#respondSun, 01 Apr 2018 16:20:45 +0000http://whalenmortgages.com/?p=654

Your Fort McMurray Mortgage Broker Jodi Whalen to help show possibilities to help get home ownership in Fort McMurray that much quicker. One of the interesting shifts in Fort McMurray real estate has been the increasing number of parents helping their children buy homes, and they aren’t selling their own home to their children. Here are a few ways parents are helping their children move out of the parents’ house and into their own Fort McMurray home.

The Gift of a Down Payment

One of the most common ways parents help a child afford a home in Fort McMurray is to give them a cash gift to use toward a down payment.

Pros:

No tax implications.

You give what you can afford when you afford it.

When multiplied by gifts by others, it could be a sizable chunk of money.

The lifetime impact is far greater than spending a similar amount on the wedding.

Cons:

They might spend the money on something else. Whether that is paying off credit card debt or a trip to Aruba depends on them.

It might not be enough for them to buy a home.

If they get a divorce, it may get split between your child and their soon-to-be-ex.

Bank of Mom and Dad

This typically takes the form of a loan from Mom and Dad to buy a house. It could be a loan for the down payment or a loan for the entire property in Fort McMurray.

Pros:

Parents can set up generous terms, including no interest loans and very flexible payment terms.

Parents can in theory take out a loan against their own home and lend money to an adult child at mutually favorable rates.

Sell the family home to your kids and they essentially pay you back over time.

Cons:

If you forgive the loan, tax bills and legal issues arise.

If you need the money and they don’t pay you, you have a new reason to fight over money over the holidays.

Don’t forget the legal paperwork. And if you neglect to have the right paperwork, there will be a mess on your hands whether there is a death, divorce, bankruptcy or another lien put on the property.

Lenders are scrutinizing borrowers more often to find private loans to get around down payment minimums, and this could hurt your child’s ability to get a mortgage in their own name.

If there’s a death or divorce, the property and the mortgage for it are involved.

Be careful that your help doesn’t end up with an adult child buying more house than they can afford. Some people would be better off buying a cheaper starter home than the larger one they qualify for with help.

“Here’s Our House”

There are families that try to solve the housing shortage by giving the young adults the family home while parents move out and somewhere else.

Pros:

The house stays in the family. For some, that’s reason enough to go with this strategy.

The young adults don’t have to move.

If the parents arrange for their kids to pay a mortgage payment while the parents move somewhere cheaper or into assisted living, they receive cash flow similar to a reverse mortgage but they’re solving the family housing problem, too.

Cons:

Capital gains taxes likely apply. Other taxes and legal fees may be required.

If you’re giving them a rental property, very high taxes are involved. And paperwork.

Your kids may not want to live in the family house.

They may feel trapped there if they accept the house and then have trouble finding work or the schools go downhill. Your gift now becomes a handicap.

“Here’s Our House – Together”

This could take the form of building a secondary home on the property like a detached home in Fort McMurray or converting the basement into a mortgage helper in Fort McMurray.

Pros:

It increases the value of the property long-term.

You gain flexibility. Whether the couple moves into the new cottage or Mom does is up to them.

If the person or family that moved into the Fort McMurray rental helper moves out, the rental unit could be rented out to someone else as a source of income.

You could see your grandkids every day.

You may have essentially set up in home care for yourself as your health declines.

Cons:

Property taxes are likely going to go up because the property value went up.

Bigger house, bigger utility bills.

You may or may not be able to take out a mortgage on the current home to pay for a project like this, though many lenders support the effort.

Do you really want to be a landlord?

Do you really want your adult children and their children living in your basement or have to live in a cottage?

What if your relatives decide they don’t want to help take care of you like cleaning your apartment? You’ve just guaranteed family fights … and you all have equity in the house.

If there is a lawsuit or divorce, now two generations (or more) may have to move … and they can’t take refuge in the others’ house.

Talk to an attorney on how this could impact your will and probate. You don’t want another heir being able to force sale of the house they don’t live in after they inherit Mom’s share upon her death.

“Where Do We Sign? And Us Too …”

Cosigning is a common way for parents to help an adult child buy a house in Fort McMurray. A cosigner improves the creditworthiness of the borrower because they’re a legal backstop for the deal.

Pros:

It could help your adult child get a better interest rate on a loan than they’d otherwise qualify for.

It doesn’t cost you anything as long as your child pays the payments.

You can do this in conjunction with cash gifts to your child without any tax implications. Yes, you could gift them $10,000 and then co-sign for a $200,000 loan.

There’s very little legal paperwork beyond co-signing the mortgage.

If your child’s credit improves, they could probably seek a new mortgage in their own name and get the parent’s name off the mortgage.

Cons:

Your child could end up taking out a larger loan than they could comfortably manage because the lenders are willing to lend them more. They end up house poor due to your “generosity”.

If your kid doesn’t pay the mortgage, you’re on the hook for it, regardless of your current ability to pay a mortgage for a home you’re not living in.

If they’re late on payments, your credit gets dinged.

By rushing to sign up with the mortgage lender, you may overlook other lenders’ better terms or rates. Consult with a Fort McMurray Mortgage Broker to find out all of your options.

]]>https://whalenmortgages.com/how-parents-are-helping-their-children-move-out-and-into-a-new-home/feed/0New FCAC Report Suggests We Be Wary of Banks | Fort McMurray Mortgage Broker shares tipshttps://whalenmortgages.com/new-fcac-report-suggests-we-be-wary-of-banks/
https://whalenmortgages.com/new-fcac-report-suggests-we-be-wary-of-banks/#respondWed, 21 Mar 2018 18:08:19 +0000http://whalenmortgages.com/?p=639On March 20th, the FCAC released a report that criticized banks for having a corporate culture too focused on selling products and services. The same report said that banks don’t have enough controls in place to protect the public from pushy sales practices.

And we know that these sales practices exist, since CBC reports that came out last year showed how banks lean on staff to meet sales targets. Employees reported raising credit limits without authorization and investing their funds in unsuitable mutual funds. However, the FCAC report didn’t say that it had found any widespread examples of unsuitable products being sold to customers.

This means the Big Six are more like financial retail outlets than traditional banks. For example, while bank staff are mostly salaried, they receive variable pay based on how many financial services they sign people up for. For managers, the payoff is even greater.

How did this happen? Technology allowed banks to shift away from traditional services like processing payments and handling transactions and selling more services and products. And they do make money selling things like mortgages, lines of credit, investments and new accounts.

More people are starting to understand that banks aren’t there for the benefit of the customer but for their own profit. These are the people who shop around for a mortgage in Fort McMurray or talk to a Fort McMurray mortgage broker instead of assuming that their bank will offer them the best rate. Yet the majority still assumes that the bank is as loyal to them as they are to it. The reason your Fort McMurray Mortgage Broker can get better rates at the same bank you bank with is due to the volume we submit and the other lenders we have access to causes the bank to offer the best mortgage rate in Fort McMurray upfront.

The FCAC report had several recommendations to protect the public. One was improving the oversight of customer complaints. Another was tying employee incentives to metrics that reflected customers’ best interests, not sales quotas. The FCAC recommended that banks prioritize customer protection and fairness. Unfortunately, that’s only half of the problem. The other half is the public’s general lack of financial literacy.

What should the public know that it doesn’t already?

Banks sell financial products, and they are not neutral financial advisors. Banks may sell you products you don’t need or are not suitable to you.

Banks work for their shareholders, not their customers.

They may charge a higher interest rate than you could get elsewhere, and they don’t have to tell you this. A Fort McMurray mortgage broker could find you a loan with better terms or a lower interest rate.

Credit cards are some of the most heavily marketed products on the planet, and loyalty programs are as tailored and tweaked as any other marketed product.

Why don’t more people know this? Well, part of it is the fact that banks help contribute to financial literacy programs. It becomes a way to market to the public and make themselves look good, the same way fast food companies may promote how much of their product you can eat in moderation as part of a “healthy” diet.